The period 1953–57, corresponding to the First Five-Year Plan, was the beginning of China’s rapid industrialization, and it is still regarded as having been enormously successful. A strong central governmental apparatus proved able to channel scarce resources into the rapid development of heavy industry. Despite some serious policy issues and problems, the communist leadership seemed to have the overall situation well in hand. Public order improved and many saw a stronger China taking form. The march to socialism seemed to go along reasonably well with the dictates of industrial development. The determination and fundamental optimism of the communist leaders appeared justified, especially in view of the decades of invasion, disintegration, self-doubt, and humiliation that had been the lot of the Chinese people before 1949.

Excerpts from a Soviet documentary film depicting China's industrial rebuilding during its First Five-Year Plan (1953–57). The anti-Chinese tone of the narration reflects the deterioration of relations between the Soviet Union and China in the early 1960s.Stock footage courtesy The WPA Film Library

The First Five-Year Plan was explicitly modeled on Soviet experience, and the Soviet Union provided both material aid and extensive technical advice on its planning and execution. During 1952–54 the Chinese established a central planning apparatus and a set of central ministries and other government institutions that were close copies of their Soviet counterparts. Those actions were officially ratified by the first meeting of the National People’s Congress in September 1954, which formally established the Central People’s Government and adopted the first constitution of the People’s Republic of China. The plan adopted Stalinist economic priorities. In a country where more than four-fifths of the population lived in rural areas, about four-fifths of all government investment was channeled into the urban economy. The vast majority of this investment went to heavy industry, leaving agriculture relatively starved for resources. The plan provided for substantial income differentials to motivate the labour force in the state sector, and it established a “top down” system in which a highly centralized government apparatus exercised detailed control over economic policy through enormous ministries in Beijing. Those developments differed substantially from the priorities and proclivities of the Chinese communist movement in the decades before 1949. Nevertheless, the First Five-Year Plan was linked with the transition of China’s rural and urban economy to collective forms.

This transition was most obvious in the countryside. After land reform had been carried out, mutual aid teams allowed the communists to experiment with voluntary forms of agricultural collectivization. A campaign was launched in late 1953 to organize into small collectives, called lower-level agricultural producers’ cooperatives, averaging 20 to 30 households.

Vehement debate soon broke out within the CCP concerning how quickly to move to higher stages of cooperative production in the countryside. The debate was symptomatic of the larger tensions within the party regarding urban and rural development, Soviet influence, and the development of huge government ministries in Beijing. The strengths of Mao Zedong lay in agricultural policy, social change, and foreign relations, and in the mid-1950s he began to shift the national agenda more in the direction of his own expertise.

In July 1955 Mao, against the wishes of most of his colleagues in the CCP leadership, called for an acceleration of the transition to lower-level, and then to higher-level, agricultural producers’ cooperatives in the countryside. The key difference between these two forms concerned the middle class of peasants, farmers able to live off their own land. The advanced cooperative was particularly disadvantageous to the wealthier peasants because it invested the cooperative itself with title to the land, granting no right of withdrawal, and because wages were based on labour performed, not land contributed. Middle-level peasants came to resent landless peasants, whom the party was recruiting into the new cooperatives. Also, the advanced form, modeled on the Soviet kolkhoz, brought with it the outside political controls that were necessary to extract the agricultural surpluses required to pay for China’s capital equipment in its industrialization and to feed those moving into the cities to work in the growing industries. Many middle-level peasants actively resisted these changes and the measures for enforcing them, particularly grain rationing, compulsory purchase quotas, and stricter regulations on savings and wage rates. Nevertheless, Chinese agricultural organization in 1956 reached the approximate level of collectivization achieved in the Soviet Union: a peasant owned his house, some domestic animals, a garden plot, and his personal savings; by the end of 1956, some seven-eighths of China’s peasant households were organized into advanced cooperatives.

Urban socialist changes

Mao combined this massive transformation of the agricultural sector with a call for the “socialist transformation” of industry and commerce, in which the government would become, in effect, the major partner. In Chinese communist fashion, this change was not simply decreed from above. Rather, extreme pressures were put on private merchants and capitalists in late 1955 to “volunteer” their enterprises for transformation into “joint state-private” firms. The results were sometimes extraordinary. For example, all the capitalists in a given trade (such as textiles) would parade together to CCP headquarters to the beat of gongs and the sound of firecrackers. Once there, they would present a petition to the government, asking that the major interest in their firms be bought out at the rate that the government deemed appropriate. The government would graciously agree.

Such actions can be understood against the background of the experiences of the capitalists in the previous few years. The Five-Antis campaign of 1952 had terrorized many of them and left most deeply in debt to the government, owing purported back taxes and financial penalties. In any case, the state sector of the economy and the state controls over banking had increased to such a degree that the capitalists relied heavily on the government for the contracts and business necessary to keep from bankruptcy. After the Five-Antis campaign, the government extended the reach of its trade unions into the larger capitalist enterprises, and the “joint labour–management” committees set up under government pressure in those firms usurped much of the power that the capitalists formerly had exercised. Thus, many Chinese capitalists saw the socialist transformation of 1955–56 as an almost welcome development, because it secured their position with the government while costing them little in money or power.

Political developments

The socialist transformation of agriculture, industry, and commerce thus went relatively smoothly. Nevertheless, such changes could not take place without considerable tensions. Many peasants streamed into the cities in 1956–57 to escape the new cooperatives and to seek employment in the rapidly expanding state-run factories, where government policy kept wages rising rapidly. China’s urban population mushroomed from 77 million in 1953 to 99.5 million by 1957.

Several problems also became increasingly pressing. First, CCP leaders found that the agricultural sector was not growing fast enough to provide additional capital for its own development and to feed the workers of the cities. Until then, agricultural policy had attempted to wring large production increases out of changes in organization and land ownership, with little capital investment. By 1956–57 that policy was shown to be inadequate.

Second, Soviet assistance had been made available to China as loans, not grants. After 1956 China had to repay more each year than it borrowed in new funds. Thus, the Chinese could no longer count on Moscow for net capital accumulation in its industrialization drive.

Third, the vastly expanded governmental responsibility for managing the country’s urban firms and commerce required far more experts than before. For this, the leadership tried to resolve the increasingly severe strains that had characterized the relationship between the country’s intellectuals (including technical specialists) and the CCP.

The leadership’s policies up to that point had been ambivalent toward the intelligentsia: on the one hand it had required their services and prestige, but on the other it had suspected that many were untrustworthy, coming from urban and bourgeois backgrounds and often having close family and other personal ties with the KMT. After 1949 and particularly during the first part of the Korean War, the Central Committee launched a major campaign to reeducate teachers and scientists and to discredit Western-oriented scholarship. In 1951 the emphasis shifted from general campaigns to self-reform; in 1955 it shifted once again to an intensive thought-reform movement, following the purge of Hu Feng, until then the party’s leading spokesman on art and literature. This latter movement coincided with the denunciation of a scholarly study of the Dream of the Red Chamber (Hongloumeng), an 18th-century novel of tragic love and declining fortunes in a Chinese family. Literature without a clear class moral received blistering criticism, as did any hint that the party should not command art and literature—a theme identified with the ousted Hu Feng—and “Hu Feng elements” were exposed among intellectuals in schools, factories, and cooperatives.

The intensity of these attacks slackened in early 1956. Party leaders publicly discussed the role of intellectuals in the new tasks of national construction and adopted the line “Let a hundred flowers blossom, a hundred schools of thought contend.” Because intellectuals in China included high school graduates as well as those with college or advanced professional training, the policy affected a vast number of people. The “hundred flowers” line explicitly encouraged “free-ranging” discussion and inquiry, with the explicit assumption that this would prove the superiority of Marxism-Leninism and speed the conversion of intellectuals to communism. Their response to the party’s invitation for free discussion and criticism was gradual and cautious. Instead of embracing Marxism, moreover, many used the opportunity to translate and discuss Western works and ideas and blithely debated “reactionary” doctrines at the very moment Hungarian intellectuals were triggering a wave of anticommunist sentiment in Budapest.

Following this initial phase of the Hundred Flowers Campaign, Mao Zedong issued what was perhaps his most famous post-1949 speech “On the Correct Handling of Contradictions Among the People” (Feb. 27, 1957). Its essential message was ambiguous. He stressed the importance of resolving “nonantagonistic contradictions” by methods of persuasion, but he stated that “democratic” methods of resolution would have to be consistent with centralism and discipline. He left it unclear when a contradiction might become an “antagonistic” and no-holds-barred struggle. The final authoritative version of his speech contained explicit limits on the conduct of debate that had been absent in the original. According to that version, the party would judge words and actions to be correct only if they united the populace, were beneficial to socialism, strengthened the state dictatorship, consolidated organizations, especially the party, and generally helped strengthen international communism. In addition, these textual manipulations led to an unresolved controversy concerning the initial intent of Mao’s speech.

The leadership’s explanation was that Mao had set out to trap the dangerous elements among the intellectuals by encouraging their criticism of the party and government. An alternative view was that the leaders used the metaphor of the trap to rationalize their reaction to the unanticipated criticism, popular demonstrations, and general antiparty sentiments expressed in the late spring, when the term “hundred flowers” gained international currency. Whatever the correct explanation for these significant textual changes, the communist leaders had encouraged free criticism of the party and its programs, and they had then turned on their critics as rightists and counterrevolutionaries. In June, noncommunists who had thrown caution to the winds reaped the full fury of retaliation in an anti-rightist campaign. The intellectuals who had responded to Mao’s call for open criticism were the first victims, but the movement quickly spread beyond that group to engulf many specialists in the government bureaucracy and state-run firms. By the fall, the fury of the campaign began to turn toward the countryside, and those, especially among the rural cadres, who had remained unenthusiastic about the “high tide” of agricultural change came under fire and were removed. The spreading anti-rightist campaign then inspired fear in those who wanted a slower, more pragmatic approach to development and shifted the initiative to others who, like Mao, believed that the solutions to China’s core problems lay in a major break with the incrementalist Soviet strategy and in a bold new set of distinctly Chinese ideas. International events dovetailed with that basic thrust by the winter of 1957–58.

Foreign policy

While the Chinese initially took their principal cues in shaping foreign policy from domestic developments and generally adhered to the initial pro-Soviet line, they began to act—on the basis of several important lessons gained during the Korean struggle—to reduce Beijing’s militant and isolationist attitudes in international affairs. Beijing had recognized that the great costs of the war, the questionable reliability of Soviet military backing, and the danger of direct U.S. retaliation against China had come close to threatening its very existence. Although in preserving North Korea as a communist state China had attained its principal strategic objective, its leaders understood the costs and risks involved and were determined to exercise a greater caution in their international dealings. Another lesson was that the neutralist countries in Asia and Africa were not Western puppets, and it was politically profitable to promote friendly relations with them. These lessons, as reinforced by domestic considerations, led China to take a conciliatory role in the conference leading to the Geneva Accords on Indochina in 1954 and to try to normalize its foreign relations.

Premier Zhou Enlai symbolized China’s more active diplomatic role at the Bandung Conference in April 1955, held at Bandung, Indonesia, which discussed Asian-African issues. His slogan was “Unity with all,” according to the line of peaceful coexistence. This “Bandung line” associated with Zhou gained worldwide attention when he told the delegates there that his government was fully prepared to achieve normal relations with all countries, including the United States. One result of his initiative was the start of ambassadorial talks between China and the United States.

Between 1955 and 1957, however, changes in Soviet and U.S. policies caused Chinese leaders to doubt the validity of this more cautious and conciliatory foreign policy. At the 20th Congress of the Soviet Communist Party in 1956, First Secretary Nikita Khrushchev announced a de-Stalinization policy. This development angered Mao Zedong for two reasons: he thought, correctly, that it would undermine Soviet prestige, with potentially dangerous consequences in eastern Europe, and he chafed at Khrushchev’s warning to other communist parties not to let a willful leader have his way unchecked. Thus, a new situation in Sino-Soviet relations began to emerge, in which antagonisms based on different national traditions, revolutionary experiences, and levels of development that had previously been glossed over broke through to the surface.

Chinese leaders—Mao foremost among them but by no means alone—now began to question the wisdom of closely following the Soviet model. Economic difficulties provided a major set of reasons for moving away from that model, and increasing mutual distrust exacerbated the situation. Nevertheless, at the end of 1957 the Soviet Union evidently agreed to provide China with the technical assistance needed to make an atomic bomb, and during 1958 the Soviet Union increased its level of aid to China. In the final analysis, however, the spiraling deterioration in Sino-Soviet relations proved impossible to reverse.

China adopted a new, more militant foreign policy that can be traced most clearly to Mao’s statement during a Moscow trip in November 1957 that the “East wind prevails over the West wind,” which implied a return to militant struggle. According to some estimates, the change in line was necessitated by the U.S. buildup of anticommunist regimes to encircle China and by the lack of major gains in peaceful coexistence with Third World neutrals. Other analysts argue that Mao regarded the launching of a Soviet space vehicle (October 1957) and the Sino-Soviet nuclear-sharing agreement as indications that the balance of world forces had changed in favour of communism.